ERICSSON (LM) TEL-SP ADR (ERIC) Stock Fundamental Analysis
USA - NASDAQ:ERIC - US2948216088 - ADR
9.45 USD
-0.03 (-0.32%)
9.39 USD
-0.06 (-0.63%)
ERIC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 48 industry peers in the Communications Equipment industry. ERIC has an excellent profitability rating, but there are some minor concerns on its financial health. ERIC scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally ERIC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ERIC had positive earnings in the past year.
In the past year ERIC had a positive cash flow from operations.
ERIC had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ERIC had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.72%, ERIC belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
With an excellent Return On Equity value of 24.01%, ERIC belongs to the best of the industry, outperforming 89.58% of the companies in the same industry.
With an excellent Return On Invested Capital value of 15.20%, ERIC belongs to the best of the industry, outperforming 89.58% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERIC is below the industry average of 12.93%.
The last Return On Invested Capital (15.20%) for ERIC is above the 3 year average (10.59%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROIC | 15.2% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
1.3 Margins
ERIC has a Profit Margin of 10.26%. This is amongst the best in the industry. ERIC outperforms 83.33% of its industry peers.
ERIC's Profit Margin has declined in the last couple of years.
ERIC has a better Operating Margin (12.97%) than 79.17% of its industry peers.
In the last couple of years the Operating Margin of ERIC has grown nicely.
ERIC's Gross Margin of 47.62% is fine compared to the rest of the industry. ERIC outperforms 62.50% of its industry peers.
In the last couple of years the Gross Margin of ERIC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% |
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ERIC is creating value.
Compared to 1 year ago, ERIC has about the same amount of shares outstanding.
Compared to 5 years ago, ERIC has more shares outstanding
ERIC has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of ERIC is 1.45, which is an excellent value as it means it would take ERIC, only 1.45 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.45, ERIC is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
A Debt/Equity ratio of 0.35 indicates that ERIC is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.35, ERIC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for ERIC, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.27
WACC6.69%
2.3 Liquidity
ERIC has a Current Ratio of 1.17. This is a normal value and indicates that ERIC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ERIC (1.17) is worse than 83.33% of its industry peers.
A Quick Ratio of 0.94 indicates that ERIC may have some problems paying its short term obligations.
ERIC has a worse Quick ratio (0.94) than 77.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 395.75% over the past year.
ERIC shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
Looking at the last year, ERIC shows a decrease in Revenue. The Revenue has decreased by -2.65% in the last year.
The Revenue has been growing slightly by 1.76% on average over the past years.
EPS 1Y (TTM)395.75%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%-5.34%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-10.28%
3.2 Future
ERIC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.10% yearly.
Based on estimates for the next years, ERIC will show a decrease in Revenue. The Revenue will decrease by -0.77% on average per year.
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.50, ERIC is valued correctly.
85.42% of the companies in the same industry are more expensive than ERIC, based on the Price/Earnings ratio.
ERIC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.91.
With a Price/Forward Earnings ratio of 14.49, ERIC is valued correctly.
Based on the Price/Forward Earnings ratio, ERIC is valued cheaper than 83.33% of the companies in the same industry.
ERIC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.5 | ||
| Fwd PE | 14.49 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERIC indicates a rather cheap valuation: ERIC is cheaper than 95.83% of the companies listed in the same industry.
ERIC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ERIC is cheaper than 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.76 | ||
| EV/EBITDA | 6.91 |
4.3 Compensation for Growth
ERIC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ERIC has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ERIC's earnings are expected to grow with 55.91% in the coming years.
PEG (NY)0.05
PEG (5Y)N/A
EPS Next 2Y89.39%
EPS Next 3Y55.91%
5. Dividend
5.1 Amount
ERIC has a Yearly Dividend Yield of 3.15%.
ERIC's Dividend Yield is rather good when compared to the industry average which is at 3.55. ERIC pays more dividend than 89.58% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, ERIC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
5.2 History
The dividend of ERIC is nicely growing with an annual growth rate of 22.02%!
ERIC has been paying a dividend for at least 10 years, so it has a reliable track record.
ERIC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)22.02%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
37.84% of the earnings are spent on dividend by ERIC. This is a low number and sustainable payout ratio.
ERIC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.84%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
9.45
-0.03 (-0.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners54.97%
Inst Owner Change0.01%
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap31.50B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target8.46 (-10.48%)
Short Float %1.13%
Short Ratio2.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
Yearly Dividend0.29
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.35%
Min EPS beat(2)-21.32%
Max EPS beat(2)20.62%
EPS beat(4)2
Avg EPS beat(4)9.6%
Min EPS beat(4)-21.32%
Max EPS beat(4)49.81%
EPS beat(8)5
Avg EPS beat(8)-42.25%
EPS beat(12)8
Avg EPS beat(12)-19.96%
EPS beat(16)9
Avg EPS beat(16)-14.95%
Revenue beat(2)0
Avg Revenue beat(2)-4.34%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-2.29%
Revenue beat(4)0
Avg Revenue beat(4)-2.81%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.49%
Revenue beat(12)3
Avg Revenue beat(12)-1.62%
Revenue beat(16)7
Avg Revenue beat(16)-0.77%
PT rev (1m)-0.93%
PT rev (3m)11.77%
EPS NQ rev (1m)-6.51%
EPS NQ rev (3m)-31.88%
EPS NY rev (1m)-1.08%
EPS NY rev (3m)1.46%
Revenue NQ rev (1m)-1.18%
Revenue NQ rev (3m)-11.66%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)-3.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.5 | ||
| Fwd PE | 14.49 | ||
| P/S | 1.23 | ||
| P/FCF | 9.76 | ||
| P/OCF | 8.74 | ||
| P/B | 2.89 | ||
| P/tB | 6.62 | ||
| EV/EBITDA | 6.91 |
EPS(TTM)0.7
EY7.41%
EPS(NY)0.65
Fwd EY6.9%
FCF(TTM)0.97
FCFY10.25%
OCF(TTM)1.08
OCFY11.45%
SpS7.65
BVpS3.27
TBVpS1.43
PEG (NY)0.05
PEG (5Y)N/A
Graham Number7.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 19.24% | ||
| ROIC | 15.2% | ||
| ROICexc | 22.2% | ||
| ROICexgc | 46.36% | ||
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% | ||
| FCFM | 12.65% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
ROICexc(3y)14.83%
ROICexc(5y)17.86%
ROICexgc(3y)47.09%
ROICexgc(5y)43.4%
ROCE(3y)13.4%
ROCE(5y)15.43%
ROICexgc growth 3Y9.12%
ROICexgc growth 5Y7.91%
ROICexc growth 3Y-8.84%
ROICexc growth 5Y4.9%
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
F-Score6
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 0.87 | ||
| Cap/Depr | 36.83% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 13.31 | ||
| Cash Conversion | 83.18% | ||
| Profit Quality | 123.37% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | N/A |
F-Score6
WACC6.69%
ROIC/WACC2.27
Cap/Depr(3y)47.04%
Cap/Depr(5y)51.35%
Cap/Sales(3y)1.94%
Cap/Sales(5y)2.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)395.75%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%-5.34%
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-10.28%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y13.49%
FCF growth 1Y392.6%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y169.74%
OCF growth 3Y5.8%
OCF growth 5Y22.35%
ERICSSON (LM) TEL-SP ADR / ERIC FAQ
What is the fundamental rating for ERIC stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERIC.
Can you provide the valuation status for ERICSSON (LM) TEL-SP ADR?
ChartMill assigns a valuation rating of 8 / 10 to ERICSSON (LM) TEL-SP ADR (ERIC). This can be considered as Undervalued.
How profitable is ERICSSON (LM) TEL-SP ADR (ERIC) stock?
ERICSSON (LM) TEL-SP ADR (ERIC) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for ERIC stock?
The Price/Earnings (PE) ratio for ERICSSON (LM) TEL-SP ADR (ERIC) is 13.5 and the Price/Book (PB) ratio is 2.89.
Can you provide the financial health for ERIC stock?
The financial health rating of ERICSSON (LM) TEL-SP ADR (ERIC) is 4 / 10.